What Merchants Need to Know About EMV

According to experts in the payment processing industry, EMV is going to change how payments are made in the United States. When it will come is still up in the air, but merchants do need to prepare themselves for the upcoming changes. The changes will affect a wide variety of businesses, and the merchant should understand what options would be available to them.

EMV, which stands for Europay, MasterCard, and Visa, is the global standard and is otherwise known as smart cards. These smart cards are able to be used in locations all over the world. The payment transaction, which is chip-based, occurs when the microprocessor that is embedded in the card or mobile phone is detected and connects with an EMV POS terminal. This smart card is able to provide another form of authentication and can actually reduce the amount of fraudulent purchases.What does this mean for the merchant? Both small and large businesses will want to determine if EMV is right for their business. While the government is not enforcing the changes, the industry itself is putting out a call-to-action for merchants to upgrade their payment processing systems. Should the merchant choose not to perform the necessary upgrades and purchase an EMV-enable system, they may lose customers, as a large number of consumers will be converting to the smart cards. What the merchant needs to remember is that when credit cards and debit cards first became available, any merchant that did not accept them as a form of payment lost out on thousands of dollars in profit. This same thing could occur for those merchants who choose not to upgrade or replace their current system with this new technology.

The cost of replacing the payment processing system will be the responsibility of the merchant. Costs will vary from one plan to another, as the cost will be determined by which features and functions the merchant needs. The small business may find that only the basic features will be necessary, while larger merchants who deal in millions of dollars in sales may need to employ the more sophisticated features of the system.

The transition to EMV-based payments will take coordination from the merchants, as the learning process could be complicated due to the fact that they will still be accepting the traditional magnetic-stripe cards for payment, as well. Coordination and a complete understanding of how the EMV system works is what will make them successful in the transition period.

Merchants must also make the decision of whether or not their smart card payment processing will require a PIN or signature from the consumer. The merchant may also choose neither for authentication. Merchants, however, should understand that without requiring either of the cardholder authentication options there will be more risk of fraudulent transactions.

In the process of switching to the EMV-based payment processing, merchants must also be prepared to educate the customers on how to use the system. Each employee that works for the merchant will need to have a complete understanding of all the new procedures associated with the new system.

As a merchant in the U.S., the only thing you can do is prepare for the upcoming changes. Your current payment processing company should be contacted to understand how they plan to switch over to EMV. By educating yourself on how you can reduce the risk of fraudulent purchases using this new system, you will find the transition will be a lot smoother for your business.



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